THE LINKAGE BETWEEN ECONOMIC GROWTH AND FINANCIAL DEVELOPMENT: EVIDENCE FROM KAZAKHSTAN

Abstract

сссThe relationship between economic growth and financial development has long been a topic of interest for economist. Continued empirical research on Kazakhstan’s financial sector, using methodologies like Vector Autoregression (VAR) models and Granger causality tests, is used to track the evolving relationship between financial development and economic growth. By addressing current challenges and deepening reforms, Kazakhstan can strengthen this linkage, driving long-term economic resilience and diversification. The results indicate minimal causal connections among GDP, FDI, and the unemployment rate. Additionally, the findings imply that stock market performance may not be closely linked to the country’s external account metrics, underscoring the role of other factors in shaping their behavior. Furthermore, the empirical evidence suggests that initiatives aimed at strengthening the current account balance could potentially influence the unemployment rate.